Thursday, August 20, 2009

The Medicare fraud prosecutions continue to mount up across the country. Further, the sentences in these cases are increasingly harsh. The tolerance for "white collar crime" by judges, prosecutors and the public has waned and apart from restitution, there is an increasing demand for jail time. If a person is convicted after a jury trial -- the sentences have been significantly longer than those entering into plea agreements -- putting greater pressure on those charged with offenses to enter into plea agreements and waive their constitutional right to a trial.

A recent case illustrates this trend. On August 7, 2009, in Miami federal court physician Keith Russell, 65, and physician’s assistant Jorge Luis Pacheco, 50, were each sentenced to 97 months in prison, and physician’s assistant Eda Marietta Milanes, 43, was sentenced to 63 months in prison, for their roles in fraud schemes that involved billing Medicare for $10,903,509 worth of alleged unnecessary HIV infusion treatments. Dr. Russell, Mr. Pacheco and Ms. Milanes were also ordered to pay more than $3.1 million in restitution to the Medicare program during their sentencing hearings before U.S. District Judge Ursula Ungaro. This sentence comes after all three were convicted by a jury of conspiracy to commit health care fraud and multiple counts of health care fraud on March 17, 2009, after a two-week trial in Miami.

In order to seek longer sentences, the government argues that those who commit health care fraud are bankrupting the health care system and threatening its fiscal integrity. The government made such arguments in this case. With the national political debate raging as to the broken health care system, these arguments add fuel to the fire.

The trial evidence in this case was that Dr. Russell, Mr. Pacheco and Ms. Milanes served as the medical staff for M&P Group of South Florida Inc. (M&P Group) and Tendercare Medical Center Inc. (Tendercare), which purported to specialize in the treatment of Human Immunodeficiency Virus (HIV). Dr. Russell was the medical director for both M&P Group and Tendercare during their operations. Mr. Pacheco (who was a licensed physician in Cuba before coming to the U.S.) and Ms. Milanes worked as medical assistants for Dr. Russell at both clinics.

One of the owners of the clinics, Tony Marrero, testified at trial that the clinics were established for the sole purpose of defrauding Medicare. Marrero testified that the scheme was to submit claims for medically unnecessary HIV infusion and injection treatments. Evidence at trial showed that Medicare was submitted billings of $10,903,509 and that the defendants' companies were paid in excess of $3.1 during approximately two years of operations.

Trial witnesses testified that the unnecessary medicines were not administered, and that the clinics were only operated to create the appearance of legitimacy. Mr. Marrero stated that he had an arrangement with a pharmaceutical wholesale company, Lifecare Medical, to buy invoices showing the purchase of large amounts of medications, when only minor amounts were actually bought. Mr. Marrero also testified that he paid Ms. Milanes and the M&P group extra money to manipulate patients’ blood samples so the lab results would appear to support the fraudulent claims. Another physician’s assistant, Luz Borrego, testified how those samples were manipulated, and Borrego also stated that she would not give the medications because she knew the medications could hurt HIV patients if actually provided.

Trial testimony established that every patient who went to the clinics was paid a cash kickback of up to $200 per visit. Four patients testified at trial that they took bribes and never received medication at the clinics. One patient testified that he used his payments from the clinics to support his cocaine addiction. Another patient testified that he did not even have HIV, notwithstanding clinic documents showing he was being infused with medication to treat HIV.
Trial evidence established that Dr. Russell, Mr. Pacheco and Ms. Milanes worked at Tendercare and M&P Group at the same time. Further, patients testified at trial that they would received cash and bogus treatments from both clinics.

At sentencing, Ms. Milanes acknowledged that she was paid extra by Marrero to manipulate blood samples to justify the false claims. Marrero testified that Pacheco worked directly for him to determine what drugs would be falsely billed to Medicare.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or by calling 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers. Their website is: http://www.greenassoc.com/

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